U.S. Stocks Pull Back Off Best Levels But Remain Modestly Higher

(RTTNews) - After failing to sustain an early move to the upside, stocks have given back some ground over the course of the trading day on Friday. The major averages have pulled back well off their highs of the session but remain in positive territory.

Currently, the major averages are holding on to modest gains. The Dow is up 73.88 points or 0.3 percent at 25,564.35, the Nasdaq is up 26.58 points or 0.4 percent at 7,654.86 and the S&P 500 is up 5.64 points or 0.2 percent at 2,827.88.

Bargain hunting contributed to the early strength on Wall Street as some traders look to pick up stocks at reduced levels following Thursday's steep losses.

The markets also benefited from easing trade concerns as President Donald Trump said he remains hopeful of a U.S.-China trade deal, noting he will meet with Chinese President Xi Jinping at the G20 summit next month.

"And I think things, probably, are going to happen with China fast because I can't imagine that they can be thrilled with thousands of companies leaving their shores for other places," Trump said in remarks to farmers impacted by the escalating trade dispute.

Buying interest waned shortly after the start of trading, however, as traders seem reluctant to make significant moves ahead of the long Memorial Day weekend.

The subsequent pullback by stocks may be partly due to news that J.P. Morgan economist slashed their second quarter GDP growth forecast to 1 percent from 2.25 percent.

The substantially lower growth forecast by J.P. Morgan came after a Commerce Department report said durable goods orders tumbled by 2.1 percent in April after jumping by a downwardly revised 1.7 percent in March.

The Commerce Department also said orders for non-defense capital goods excluding aircraft, an indicator of business spending, slumped by 0.9 percent in April after rising by 0.3 percent in March.

Shipments in the same category were unchanged in April following a downwardly revised 0.6 percent drop in the previous month.

"The April durable goods report was bad, particularly the details relating to capital goods orders and shipments," the J.P. Morgan economists wrote.

They added, "Coming on the heels of last week's crummy April retail sales report, it suggests second quarter activity growth is sharply downshifting from the first quarter pace."

Most of the major sectors are showing only modest moves in mid-day trading, although notable strength is visible among biotechnology and networking stocks.

On the other hand, oil service stocks have come under pressure over the course of the session, dragging the Philadelphia Oil Service Index down by 1.2 percent.

The weakness among oil service stocks comes as the price of crude oil has pulled back near the unchanged line after an initial move to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index rose by 0.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both advanced by 0.7 percent.

In the bond market, treasuries have climbed off their worst levels but remain in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.6 basis points at 2.322 percent.